Union Budget 2019: House that! One more reason to go for a weekend nest

KOLKATA: Souvick Basu, a senior associate at an IT firm, has for long wanted to sell his sprawling ancestral house in Behala and move to New Town. But he hasn’t quite been able to make up his mind. That changed on Friday, when the Budget proposals provided the necessary impetus for him to finally make a decision.

“I am now thinking of selling off the house and buy two flats in New Town, one in which I will live and the other for investment,” the techie said. Two proposals — income tax exemption on the notional rent of a second self-occupied home; and benefit of roll-over of capital gains under Section 54 of the Income Tax Act to two houses for a taxpayer having capital gains up to Rs 2 crore — are expected to prompt many home-owners to consider buying a second home. Surekha Bihani, managing director of international propety consultant JLL, sees a big boost to home-buyers in the affordable and mid-income segment. “The provision of total tax exemption for individuals having taxable income up to Rs 5 lakh will improve liquidity to the tune of Rs 12,500 annually. This will boost demand across the affordable and mid-income segment,” he said. NK Realtors VP Biplab Kumar expects many families to opt for second homes at even weekend destinations like Santiniketan and Siliguri. “Middle-class families have always aspired for a second home but never been able to realize it due to the prospect of having to pay additional income tax on the notional rental income from the property. Also, many families with earnings of less than Rs 5 lakh a year and living in cramped quarters desire a second house. They, too, will be interested,” said Kumar. Realtors expect many families to sell their ancestral homes and move to gated community projects. Anuj Puri, chairman of Anarock Property Consultants, says there is a decisive push to the second-home market. He feels the implications are favourable for affordable, but not quite so for mid-income housing. “There was no major tax relief to the real middle-class. There were promises of reduction on GST burden on homebuyers, but no announcement of actual relief,” he said.